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Conservator of Forests Nizamabad Circle, Nizamabad and ors. Vs. K. Sridhara Reddy - Court Judgment

LegalCrystal Citation
SubjectContract;Civil
CourtAndhra Pradesh High Court
Decided On
Case NumberWrit Appeal Nos. 71 and 72 of 1964
Judge
Reported inAIR1968AP198
ActsAndhra Pradesh (Telengana Area) Forest Contract Rules - Rules 15, 15(1), 29(1), 29(2), 29(3), 30, 30(3), 31(1) and 31(3); ;Andhra Pradesh (Telengana Area) Forest Act, 1355F - Sections 29 and 81; Indian Contract Act, 1972 - Sections 74; Code of Civil Procedure (CPC), 1908 - Order 41, Rule 2
AppellantConservator of Forests Nizamabad Circle, Nizamabad and ors.
RespondentK. Sridhara Reddy
Appellant AdvocateO. Adinarayana Reddy, Adv. for ;Principal Govt. Pleader
Respondent AdvocateHaridatha Reddy, Adv. for ;K. Madhava Reddy, Adv.
DispositionAppeal allowed
Excerpt:
contract - termination of forest contract - rules 31, 15, 29 (2), 29 (3), 30, 31 (1) and 31 (3) of a. p. (telengana area) forest contract rules (rules framed under a. p. (telengana area) forest act, 2 of 1355f), section 74 of contract act, 1872, order 41 rule 2 of code of civil procedure, 1908 and clause 15 of letters patent (madras) - petition seeking direction to restrain respondent from collecting sum as arrears of land revenue and penalty - according to rules contractor is not absolved from all his liability even after termination of contract - government has right to collect penalty of forest agreement after termination of contract - held, government cannot be prohibited from collecting penalty because contractor is allowed to continue until date of termination. - - 11,250.'the.....anantanarayana ayyar, j. 1. sridhara reddy filed writ petition no. 106 praying for the issue of a writ in the nature of mandamus or such other appropriate writ, direction or order as may be deemed necessary to restrain respondents 1 and 2 from imposing and demanding a sum of rs. 23,088 towards government loss or fine and to restrain them from collecting the said sum as arrears of land revenue. this sum included a sum of rs. 11,250 by way of penalty. there were three respondents in the said writ petition viz.. the conservator of forests. divisional forest officer and tahsildar.2. sridhara reddy filed another writ petition no. 107 of 1962 against the same respondents for similar relief regarding another sum of rs. 27,949 which included a penalty of rs. 14,500.3. the respondents represented.....
Judgment:

Anantanarayana Ayyar, J.

1. Sridhara Reddy filed Writ petition No. 106 praying for the issue of a writ in the nature of Mandamus or such other appropriate writ, direction or order as may be deemed necessary to restrain respondents 1 and 2 from imposing and demanding a sum of Rs. 23,088 towards Government loss or fine and to restrain them from collecting the said sum as arrears of land revenue. This sum included a sum of Rs. 11,250 by way of penalty. There were three respondents in the said Writ Petition viz.. the Conservator of Forests. Divisional Forest Officer and Tahsildar.

2. Sridhara Reddy filed another Writ Petition No. 107 of 1962 against the same respondents for similar relief regarding another sum of Rs. 27,949 which included a penalty of Rs. 14,500.

3. The respondents represented by the learned IIIrd Government Pleader, contested the two Writ Petitions after filing counter in each of them.

4. Our learned brother. Gopal Rao, Ekbote J heard both the Writ Petitions together by common consent and passed a common judgment allowing both the Writ Petitions only to the extent of reducing the compensation (penalty) in each case to a sum of Rs. 100.

5. The respondents filed Writ Appeals Nos. 71 and 72 of 1964 against the judgment so far as it related to W. P. Nos. 106 and 107 of 1962 respectively. Sridhara Reddy has not filed any appeal against the judgment in so far as it went against him, relating to other items of demand notices.

6. The relevant facts in Writ Petition No. 106 of 1962 are as follows. The petitioner was a forest contractor and entered into a written forest contract (agreement) under Rule 29 of the Rules framed under the Andhra Prahesh Telengana Area) Forest Act (No. II of 1355F) hereafter referred to as the Act. Clause No. 7 of the agreement runs as follows:--

'Penalty for breach of conditions. The forest contractor ...... further agrees to pay to the Government a sum of not exceeding one quarter of the total consideration payable by him under this contract for every omission by himself, or for every act by himself or by his servants, or agents which may be in contravention of this clause. For the purposes of this clause, the total consideration payable for this contract has been estimated by the forest officer to be Rs. 45,000, ............ 1/4 of which is Rs. 11,250.'

The forest agreement is signed by the Conservator of Forests, Nizamabad and the Divisional Forest Officer as well as by the contractor. Subsequently, the Officers of the Forest Department hereafter referred to for convenience as the 'Department') took action against the contractor on the ground that he had committed breach of the contract. Ultimately, the Conservator of Forests passed au order, which is concerned in W, P No 106 or 1962, levying as follows :--

(1)GovernmentlossRs. 11,426/-(2)Compensation1/4th auction amountRs. 11,250/-(3)Fine alreadylevied.Rs. 40/-(4)Fine fortransporting the timber without hammer and permit to the unauthorised depot.Rs. 200/-.(5)Fine for damage of 22 teak and 31 non-teaktrees in the coupe.Rs. 172/-

Rs. 23.008/-

The Divisional Forest Officer issued a notice of demand dated 22-7-1960 to Sridhara Reddy stating as follows:-- 'The Conservator of Forests levied the following penalties ......... as per Section 29 of the Forest Contract Rules ............ ...... Please pay the amount within a week ................'

7. Similarly, the Conservator passed another order making levy, which is concerned in W. P. No. 107 of 1962, as follows:

(1)Government loss. Rs 13,449-0-0.(2)Fineas perRs. 29 of Contract Rules. (1/2th Of auction amount). Rs 14.500-0-0

Rs. 27.940-0-0

The Divisional Forest Officer issued a similar demand notice dated 16-10-1960 for this amount.

8. In each case, contract was due to expire on 31-12-1960. The competent forest authority terminated each of the contracts by a notice dated 28-12-1960. Subsequent to the termination, the Department took steps for collection of the entire amount regarding each contract as arrears of land revenue. The Tahsildar issued notice dated 8-1-1962 regarding the amount concerned in W. P. No. 106 of 1962 and another notice dated 9-1-1962 regarding the amount concerned in W P. No. 107 of 1962. threatening to attach and sell properties of the petitioner. Thereupon, the petitioner (hereafter referred to as the contractor) filed the Writ Petitions out of which these Writ Appeals arise.

9. The relevant Rules run as follows: 'Rule 15 (1). Liability of the forest contractor for damage caused. A forest contractor shall be responsible for any damage that may be done in a reserved forest by himself or his servants and agents. The compensation for such damage shall be assessed by the Divisional Forest Officer, whose decision shall be deemed to be that of an arbitrator and hall be final and binding on the parties, except to the extent that it shall be subject to an appeal to the Conservator of Forests.... (2) Any sum assessed as damages under this rule shall be recoverable as arrears of land revenue, and a certificate under the hand of the Divisional Forest Officer that such sum is due shall be presumed to be correct by the revenue officer empowered to collect.' Rule 29 is in the following terms:--

'Rule 29 (1). Penalty by on termination of a contract for breach of conditions --Every forest contract shall be in writing in the form annexed hereto and shall contain a provision whereby the forest contractor binds himself to do all the duties and acts required to be done by or under the contract, and covenants that he and his servants and agents shall abstain from all the acts for bidden by or under such contract.

(2) The sums to be mentioned in a forest contract payable in case of a breach of any such stipulation shall not exceed one-quarter of the total consideration to be paid by the contractor, and shall be recoverable in accordance with the provisions of the Hyderabad Forest Act 1355 F. and of this rule:

(3) This sum shall be realized from the contractor unless the contract has been duly terminated in accordance with the provisions of Rule 30, and then only under the written order of the forest officer executing the contract.'' Rule 30 is as follows:--

'30 (1). Termination of a contract for breach of conditions-- A forest contract may be terminated by the officer ......... ifthe forest contractor makes default in the payment of the consideration for hit contract or of any instalment thereof, or commits a breach of any of tht other conditions of his contract. (2) Such termination shall be notified to the forest contractor by a written notice.....

(8) On such termination Government shall be entitled-

..... (c) to recover as arrears of land revenue any penalty which may be recoverable under Rule 29; and

(d) to recover any damage which may be assessed under Rule 15.' Rule 31 runs as follows:--

'31 (1). Penalty for breach of conditions without termination--Where the forest contractor commits a breach of any of the conditions of his contract but it is not proposed to terminate his contract on account thereof, the whole penalty provided for in Rule 20 shall riot be recovered from him, but the Divisional Forest Officer shall have power to recover a portion thereof, not exceeding one hundred rupees, .........

(2) An order of the Divisional Forest Officer under this rule shall be subject to appeal to the Conservator of Forests if the amount levied exceeds fifty rupees, but shall otherwise be final.

(3) The payment of a sum assessed under this rule shall absolve the forest contractor from all further liability under his contract in respect of such breach, except his liability under Rule 15 for damage done in a reserved forest.'

10. As mentioned by our learned brother in his judgment, contentions were raised before him as follows:--

'It is now contended by the petitioner that, in view of Rule 31 of the Rules made under the Hyderabad Forest Act, the respondent is not entitled to get more than Rs. 100 by way of compensation out of 1/4 amount mentioned in the lease inasmuch as the respondent did not prefer to determine the contract simultaneously ............... The learned Government pleader however argues that the meaning to be attributed to the language employed in Rule 31 should be that only recovery of the amount not exceeding Rs. 100 for the time being is mentioned. It does not take away the power of the Government to subsequently collect, the remaining amount mentioned as on fourth compensation to be paid under the lease although the contract was not determined then.'

11. Our learned brother disagreed with the contention of the learned III Government Pleader and. in effect accepted the contention on behalf of the contractor, after a detailed consideration of the relevant Rules.

12. The learned Judge came to his conclusion on the following grounds with special reference to W. P. No. 106 of 1962 : (a) the rules indicate that the Government had two alternatives: (i) to determine the consideration forthwith in which case by proposing to put an end to: the contrail the Department can recover the entire amount of 1/4 compensation mentioned in the lease on (ii) levy penalty by the Department not proposing to terminate the contract on account of bread, of any conditions of the contract in which case only, a maximum of Rs. 100 can be recovered and not a maximum of 1/4th of the lease amount; (b) the decision i.e.. the choice between the two alternatives is left to the Department when he breach occurs; and should be exercised on 22-7-1960 so far as W P, No. 106 of 1962 is concerned and on 16-10-1960 in so far as W. P No. 107 of 1962 is concerned: and (c) there is no record to show that the Government proposed to terminate the contract on 22-7-1960, and on the other hand, the notice issued to the contractor dated 22-7-1960 necessarily implies that the Government had not proposed to determine the contract and this is supported by subsequent determination of the contract many months later on 28-12-1960.

13. Our learned brother rejected the contention of the III Government Pleader on the following main grounds: (d) if the rule-making authority wanted to say that for the time being Rs. 200 alone would be collected, such authority could haw clearly stated so but the actual wording of Rule 31 supports the contention on behalf of the Contractor; (e) it appears from Rule 29 (2) and Rule 31 that, if the contractor is allowed to continue the contract by exercise of the discretion as referred to in ground (b), the Government will not be entitled to recover the entire amount of 1/4 lease amount: and (f) the interpretation as mentioned above is reasonable and is in consonance with S. 74 of the Indian Contract Act and the scheme of the Rules.

14. The learned Government Pleader appearing on behalf of the appellants in these Writ Appeals has challenged the correctness of the interpretation of the Rules at made by our learned brother. The original Rules are in Urdu The English translations, extracted by us above, are aa found in the Publication of 'Manual of Civil Laws' by Andhra Law Times Volume 3 at p. 697 relating to 'Forest Contract Rules'.

15. Counsel on both sides are agreed that, on the original Urdu wording, Sub-rule (3) of Rule 29 means that the amount mentioned in Sub-rule (2) can be realised if the contract has been duly terminated in accordance with the provisions of Rule 30. We accordingly proceed to decide these appeal on that basis.

16. From the rules, which we have already extracted, the following appears to be the scheme relating to liability of and recovery from a contractor regarding a breach of condition of forest contracts committed by him which resulted in damage to the forest such as illicit felling of trees concerned in the present cases.

17. The contractor would be. liable to pay compensation representing damage referred to in Rule 15 and penalty which is concerned in Rules 29, 30, 31 and Clause 7 of the forest contract. The provisions are as follows:

COMPENSATION: (a) No sum is mentioned or provided for as maximum limit such as in Rule 29 (2). Apparently, this is because the amount of damage depended on the individual act which constituted the breach of condition (e.g.), illicit cutting of trees.

(b) The amount of compensation is to be assessed by forest authority by proceedings under Rule 15.

(c) Every such order of assessment shall be subject to appeal under Rule 15 (1), whatever that magnitude of the sum at which the compensation was assessed.

(d) The amount so assessed shall be re-overable as arrears of land revenue, Vide 'Rule 15 (2).

(e) This compensation is distinct from penalty concerned in Rule 29 and its recovery would stand unaffected by the question whether the forest contract is terminated or not, In particular, even if it is not proposed to terminate a contract and. before termination of a contract, a sum is paid as penalty under Rule 31. such payment shall not absolve the liability of the contractcr from payment of compensation under Rule 15. Vide Rule 31 (3), PENALTY.

QUANTUM:-- Rule 29 (2) provides that the sums to be mentioned in forest contract as payable in case of a breach of any stipulation shall not exceed one-fourth of the contract amount. This provision contemplates a specific sum to be mentioned This sum is referred to in Rule 31 (1) as whole penalty. In the two present cases, entry was made in the contract concerned in W. P No. 106 of 1962 as 'the forest contractor ......... agrees to pay to the Government a sum of not exceeding ............ Rs. 11,250' The sum corresponding in the contract concerned in W. P. No. 107 of 1962 is Rs. 14,500 The forest authority demanded in each case the sum of Rs. 11.250 on 22-7-1960 and the corresponding sum of Rs. 14,500 on 16-10-1960 at a time when the contract was not yet terminated.

REALISATION:--

(i) If the contract has been duly terminated under Rule 30: For convenience, we shall refer to this contingency as contingency (i) and the period covered by it is period of Rule 29 (3). (a) The sum mentioned in Rule 29 (2) shall be realised hut only under written order of the forest officer executing the contract, vide Rule 29 (3). (b) No appeal is provided such as is provided in Rule 15 (2) against the order of recovery This obviously because recovery is of a sum mentioned in the contract signed by the contractor and (sic)t of an amount which has to be assessed (sic)d is assessed such as concerned in Rule 15 (1). The amount realisable as penalty is an amount fixed by the contract and is based on the contract (one-fourth of the contract amount) and is not limited by the extent of damage which resulted to the party from the concerned act of the contractor which formed breach of condition of contract, (c) The power or authority to realise and recover under a written order is not restricted to any amount lower than the whole penalty, (d) The Government shall be entitled to collect the amount of penalty as arrears of land revenue, vide Rule 30 (3) (c).

(ii) If it is not proposed to terminate the contract on account of a breach of condition as mentioned in Rule 31 (1): For convenience, we shall refer to this as contingency (ii) and the period over which this contingency exists as period of Rule 31. (a) The whole penalty i.e.. the amount mentioned in Clause 7 of the contract in accordance with Rule 29 shall not be recovered from the contractor, (b) The forest authorities shall have pov/er to recover only a portion of the whole penalty, which portion shall not exceed Rs. 100. (c) Such sum to be recovered is to be assessed by the forest authority i e.. Divisional Forest Offirer. (d) Such order of assessment shall be subject to appeal if the amount referred to as 'levied' in Rule 31 (2) and as 'sum assessed' in Rule 31 (3) exceeds Rs. 50. (e) The sum shall be recoverable i.e.. the forest authority shall have power to recover, in accordance with the provisions of the Hyderabad Forest Act (II of Fasli 1355) Section 81 of the Act provides 'all amounts payable to the Government under this Act or under any Rules made under this Act. ..................... if not paid in time ............ be recovered ...... .... as if it were an arrear of land revenue.' (f) The payment of the sum assessed under Rule 31 (3) shall absolve the forest contractor from all further liability under his contract in respect of the breach of condition except liability under Rule 15.

18. It will be observed that the provision regarding realisation of the penalty in the Rules makes a distinction only regarding two contingencies namely, (i) after a forest contract has been terminated, vide Rule 29 (3): and (ii) at a time when it is not prooostd to terminate the contract, see Rule 31 The quantum of 'whole penalty' is the same for either of these contingencies. The difference between them is only regarding realisation and power to realise. In the first contingency the 'whole penalty' shall be realised from the contractor under Rule 29 (3), Such realisation is mandatory and can be done as arrears of land revenue straightaway under Rule 30 (3) (c). On the other hand, in the second contingency, the actual liability of the contractor is restricted and the power of the Department to recover is curtailed to a portion of the whole penalty which portion is to be assessed under the provisions of Rule 31. Such assessment by itself does not absolve the contractor from further liability regarding the breach of condition. Only payment by him of the 'sum assessed' absolves him from all further liability. This provision in Rule 31 (3) indicates clearly by implication that, until that particular stage mentioned in Rule 31 (3) is reached, the contractor is not absolved from all further liability and that, therefore, the scope for further liability subsists. The scope of further liability can include liability for an amount still necessary to make up the whole penalty which can result under Rule 29 (3) from termination of the contract under Rule 30.

19. In this case, it cannot be said that the stage mentioned in Rule 31 (3) was reached. The amount of penalty, as contemplated under Rule 31, was not assessed at all. The proceedings in which the Conservator fixed the penalty referred to in notices dated 22-7-1960 and 16-10-1960 were proceedings of assessment under Rule 15 but not of assessment under Rule 31. The demand notice expressly mentions that levy of penalty was made under Rule 29 and makes no mention of Rule 31 No proceedings were started or even contemplated under Rule 31.

20. The contingency which is describe in Rule 31 'where .......... it is not proposed to terminate his contract on account thereof is a state of affairs. It is capable of ceasing to exist and coming to an end. It does not exist and cannot exist after it is positively proposed by the competent forest authority to terminate the contract or after the contract is actually terminated. After the contract was terminated on 28-12-1960, the state of affairs postulated in Rule 31 (1) certainly could not and did not exist.

21. It is a fact that, at a time before the contract was terminated on 22-7-1960 in W. P. No. 106 of 1962 and on 16-10-1960 in W. P. No. 107 of 1962. the Divisional Forest Officer made a demand for the whole penalty. At that time, the conditions contemplated in Rule 29 (3) read with Rule 30 did not exist. For, the contract had not been terminated. There is no evidence placed before us to show that, on those dates, there was a proposal to terminate the contract or that any other circumstances existed in which it could be said that the condition mentioned in Rule 31 (i.e., it is not proposed to terminate the contract) could not exist. Consequently, on 22-7-1960, Rule 31 (1) applied and. therefore, the whole penalty was incapable of being recovered from the contractor and the power of the Divisional Forest Officer to recover was curtailed to a sum to be assessed by him under Rule 31 which was subject to a maximum of Rs. 100. But, it is not shown that, any time up to 28-12-1960, anything happened which would result in the contractor being absolved of all further liability beyond what is contemplated in Rule 31 (!) and up to the limit of the whole penalty contemplated in Rule 29 (2). Consequently, the state of affairs mentioned in Rule 31 (1) did not bring about a result mentioned in Rule 31 (3) and itself came to an end on 28-12-1960 being replaced and under which the whole penalty was not only recoverable but also had to be realised in view of the mandatory provision. There is written order of the Forest Officer as contemplated by Rule 29 (3).

22. We proceed to deal with the various grounds on which our learned brother, Ekbote, J. based his judgment.

23. Ground No. (c), as a statement of fact, is correct. But, this does not affect the right of the Department to recover the whole penalty after the termination of the contract on 28-12-1960.

24. GROUND NOS. (a) and (b):-- The relevant facts in Writ Petition No. 106 of 1962. as apparent from the records, are as follows. The concerned breach of condition consisted of illicit felling of 343 trees in addition to illicit felling of 1597 trees which were marked and took place even prior to 25-6-1960. The Department detected this illicit felling and called on the contractor by a letter dated 25-6-1960 to offer his explanation about this breach of condition for the purpose of assessing damages and levying penalties (under Rules15 and 29). The petitioner did not submit any explanation in time. Therefore, the Conservator of Forests passed an order leving penalty of Rs. 11.250 in addition to fixing the Government loss, being the value of 343 trees at Rs. 11,426. The Divisional Forest Officer wrote his letter dated 22-7-1960 mentioning the fact of fixing of damages and levy of penalty by the Conservator of Forests. Obviously, the levy of penalty itself had been done by the Conservator of Forests even prior to the letter dated 22-7-1960 being written. Subsequent to this letter dated 22-7-1960, on 30-7-1960, the contractor wrote a letter submitting his explanation requesting for re-enumeration of stumps in his presence. The Department (R-2) wrote a letter dated 22-8-1960 to check the stumps ir the coupe as desired by the petitioner before 15-9-1960. But, the contractor failed to check the stumps and avail himself of the opportunity given to him. Consequently, the Conservator passed final order dated 28-12-1960 terminating the contract Subsequent to 28-12-1960. the Department asked the petitioner to pay the amount which had been fixed in proceedings of the Conservator mentioned in the letter of the second respondent dated 22-7-1960 The contractor failed to pay the amount viz., total sum of Rs. 23,088. Therefore, at the instance of the Department, the Tahsildar (R-3) was directed to recover the amount under S. 81 of the Forest Act. The Tahsildar accordingly took steps for collection of the whole penalty and issued attachment order dated 8-1-1962. It is about this attachment order that the contractor is primarily aggrieved in his Writ Petition and the relief he prays for is against the collection of the whole penalty long after the contract has been terminated.

25. From the above narration of facts, it is clear that breach of condition took place lone prior to 22-7-1960 and that order levying penalty was also passed by the Conservator o Forests in proceedings under Rules 15 and 29 prior to the letter of the second respondent dated 22-7-1960 to the contractor after calling for explanation from him. The position was substantially similar in Writ Petition No. 107 of 1962. We have already indicated chat the period during which action can be taken under Rule 31 is a period and not a particular point of lime and that it starts at the lime when the breach of contract occurs and ends at a time when it is positively proposed to terminate the contract or at the lime when the Department actually terminates the contract. During that entire period, the Department has e power to either lake action under Rule 31 or not to take action under Rule 31. In this particular case, action under Rule 31 was not taken at any time and the Department did not take any steps by which it was committed to take action under Rule 31, In fact, it appears clear from the records that breach of condition had taken place considerable time prior to 22-7-1960 regarding contract in W. P. No. 106 of 1962 and prior to 16-10-1900 regarding the contract concerned in W. P. No. 107 of 1962. We have already pointed out that merely not proposing to terminate the contract is only a state of affairs.

26. We have also indicated that such state of affairs was capable of coming to an end and ceasing to exist and that it did cease to exist in this case on 28-12-1960 when competent authority terminated the contract.

27. Our learned brother, Ekbote, J. has acted on the basis that, on 22-7-1960, the Department was bound to make a choice forthwith between two alternatives i.e., whether to terminate the contract and not to terminate it and that, because the department did not terminate the contract at that particular point of time, the period of Rule 31 started. The period of Rule 29(3) would start at the time when the termination of the contract is done. In this case, it started on 28-12-1960. The time at which it should end would be the time when the contract expired by efflux of time, as a contract cannot be terminated after it was expired by efflux of time. The period of Rule 31 (1), by its very nature, is a period which begins from the breach of condition. But, it cannot be said that it also ends at the time of breach of condition or on the date of demand notice if the Department does not choose to terminate the contract at that time. The time mentioned in Rule 31 is a period which can and would continue up to a stage at which it cannot be said any more that it is not proposed to terminate the contract on account of the breach. The period of Rule 31 will come to an end at a moment when the contract is actually terminated or at a moment when it is positively proposed to terminate the contract. In this matter, the wording of body of Rule 31 (1) is clear and has to be interpreted in preference to the heading of Rule 31. If the Department wants to take action under Rule 31. it must proceed to assess penalty under Rule 31. In the demand notices dated 22-7-1960 and 16-10-1960, the Department expressly mentioned that it levied penalty under Rule 29 and it demanded the whole penalty mentioned in Rule 29 (2). There was no order of assessment of penalty as contemplated in Rule 31 (2) nor was there any payment as contemplated in Rule 31(1). Therefore, Rule 31 (3) did not bar the collection of whole penalty at the proper time. On the dates, 22-7-1960 and 16-10-1960. It was not yet proposed to terminate the contract and, therefore, the whole penalty could not ba collected. But, after the contracts were terminated on 28-12-1960, the whole penalty in each case can be collected.

28. If the words 'further liability' mentioned in Rule 31 (3) are interpreted as including the liability to termination of the contract, the contract cannot be terminated if and after the contractor makes payment under Rule 31 (1). But, we nerd not go and we do not go into that question, because there has been no such payment in this case.

29. There is no rule which lays down expressly or by implication that it is necessary to terminate the contract or decide to terminate the contract on the day on which the breach occurs. It may not even be possible in each and every case of breach of condition to terminate the contract on the date of breach of condition especially when the Department requires time or takes time to determine whether there was breach of condition after calling for explanation of the contractor and giving him an opportunity to make his representation. It was also not necessary under the Rules to terminate the contract concerned in W. P. No. 106 of 1962 on 22-7-1960 or the contract concerned in W. P. No. 107 of 1962 on 16-10-1960. We find accordingly and hold that Ground No. (a) and No. (b) are not tenable.

30. GROUND NO. (d):-- It is true that Rule 31 (1) does not say that only portion of the whole penalty shall be collected for the time being. But, when Rule 31 (1) mentions that the power of the forest authority to recover whole penalty is restricted as mentioned therein at the time when the requisite exists and when there is nothing else in any rule expressly or by implication restricting the power of the authority to terminate the contract, it necessarily follows that the restriction by Rule 31 (1) exists only so long at the requisite exists and that the restriction ceased to exist when the requisite ceases to exist by termination of the contract or by proposal to terminate the contract. This means that the restriction by Rule 31 (1) is only 'for the time being' when we mean by that phrase so long as the requisite exists.' We disagree with the finding of our learned brother. Ekbote, J. on ground (d) and hold that though there is no express statement by rule making authority, the restriction made by Rule 31 (1) would be in force so long as the requisite exists and, therefore only for the time being and that it would cease to be in force when the requisite ceases to exist.

31. GROUND (e):-- In view of our finding on Grounds (a), (b) and (d), we find that merely because the contractor is allowed to continue the contract until the date of termination (28-12-1960)., the Government is not precluded from collecting the whole penalty. We also find that there is no bar under Rule 31 (3) and that the Government is entitled to recover the whole penalty after the termination of the contract in the circumstances of the two present cases.

32. GROUND (f):-- Section 74 of the Indian Contract Act runs as follow:--

'When a contract has been broken, if a sum is named in the contract as the amount to be paid in case of such breach; or if the contract contains any other stipulation by way of penalty; the party complaining of the breach is entitled, whether or not actual damage or loss is proved to have been caused thereby, to receive from the party who has broken the contract reasonable compensation not exceeding the amount so named or as the case may be. the penalty stipulated for .....................'

This provision is consistent with the right of the Government to collect penalty mentioned under Rule 29 and Clause 7 of the forest agreement after the contract has been terminated. Section 74 of the Contract Act does not stand in the way of the collection of the whole penalty also, as on the date of the Writ Petitions. Section 74 is not clinching.

33. We are unable to agree with the interpretation of Rules . 29, 30 and 31 by our learned brother, Ekbote, J. as given by him in his judgment. We disagree with his view expressed in grounds (a), (b) and (d) to the extent indicated by us.

34. The learned Government Pleader has also urged another point namely, that a Writ of Mamdamus cannot be granted to the petitioner to enforce a contractual right. This point was not urged before our learned brother. Gopal Rao Ekbote, J. and is not even mentioned in the Memorandum of Grounds in the Writ Appeal Further, the appellant has succeeded on merits on other grounds. So. we find no necessity to go into this ground.

35. In the result, we allow each ofthese two Writ Appeals in view of ourfinding regarding the right of the Department to recover the whole penalty, setaside orders of our learned brother. GopalRao Ekbote. J. and dismiss each of theWrit Petitions Nos. 106 and 107 of 1962 withcosts here and before the learned Judge.Government pleader's fee is fixed at a totalsum of Rs. 400 (Four Hundred) in the WritAppeals as well as the Writ Petitions.


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